In the midst of U.S.-China trade tensions and political turbulence in Hong Kong hotel companies have been affected in the third quarter, with Hilton, InterContinental Hotels Group (IHG) and Accor all reporting declines in Asia.
In a call with investors on Wednesday, Hilton CEO Christopher Nassetta said that third-quarter revenue per available room (RevPAR) decreased 2.7% in its Asia-Pacific region, weighed down by a 5.6% RevPAR drop in China where as in Hong Kong, Hilton reported a RevPAR decline of 40%.
Nassetta said “Hong Kong obviously had a tough quarter.[For the year], we think greater China will be down low single digits, [let’s] call it 3%. Mainland China we think will be flat to down a point and Hong Kong down 23% to 25%.”
Systemwide, Hilton’s RevPAR growth was somewhat stagnant in the quarter, up just 0.4%.
For IHG, Asia was likewise sluggish, with the company reporting a third-quarter RevPAR decrease of 2% in mainland China, due in part to lower corporate and meetings business, as well as a 36% RevPAR drop in Hong Kong.
The company’s RevPAR in greater China slipped 6.1% for the quarter, while IHG’s systemwide RevPAR fell 0.8%.
Accor was deeply impacted by the same headwinds, reporting an Asia-Pacific RevPAR decrease of 1.1% in the third quarter, with greater China posting a RevPAR decline of 6.7%.
Accor has six properties in Hong Kong.
China’s downtrend also had a disproportionate impact on Accor’s luxury portfolio, with Morin estimating that the Chinese market accounts for around 40% of Accor’s luxury room inventory in its Asia-Pacific region. Accor’s luxury segment — which includes the Raffles, Fairmont and Sofitel brands, among others — saw RevPAR fall 0.4% globally in the quarter.
Systemwide, Accor’s third-quarter RevPAR was down 0.7%.
Meanwhile, Morin’s somewhat pessimistic outlook was echoed by Hilton’s Nassetta, who said concerns about Asia, combined with other macroeconomic and geopolitical issues across the globe, are “creating a level of uncertainty” within the hospitality sector.
